Top broker Macquarie has upgraded its forecast for lithium prices, which bodes well for ASX lithium shares.

The upgrade comes a month after fellow broker Goldman Sachs tipped a “sharp correction” in lithium prices due to an impending oversupply, which sent ASX lithium share prices tumbling.

According to reporting in The Australian, Macquarie reckons new supply from up-and-coming spodumene producers won’t reach a material volume until 2023.

So, that will support lithium prices as strong demand for the commodity continues, particularly from the burgeoning electric vehicle (EV) market.

In fact, the broker says this demand could potentially more than offset any increase in lithium supply.

Forecast for lithium price up 8% to 13%

Macquarie “now expects spodumene prices to peak at US$4,900 a tonne in the September quarter”, according to the article.

As a result, it has upgraded its short-term and medium-term forecasts by 8% to 13% per tonne.

The article quoted Macquarie as saying the upgrade reflects the “persisting market deficit despite an accelerating supply response”.

The broker noted that spot lithium prices in China were increasing after a recent correction.

Macquarie describes the lithium market as remaining “tight”. Rebounding EV sales are supporting the price after supply chain issues caused by COVID-19 lockdowns in China resulted in a lull.

What does this mean for ASX lithium shares?

Like any ASX resources company, lithium miners are price takers. The higher the lithium price is, the more profit they make. And vice versa.

ASX lithium shares have become a very popular part of the equities market. Governments, businesses and consumers around the world are finally taking climate change seriously. This is giving momentum to pretty much any company involved in the green energy supply chain.

Time will tell whether all these young growing companies in lithium mining will end up creating an oversupply, which would likely reduce lithium prices.

Which ASX lithium shares should you buy?

As my Fool colleague James reported recently, broker Bell Potter has a buy rating on four ASX lithium shares.

Bell Potter’s lithium share picks are as follows:

• Allkem Ltd (ASX: AKE) with a share price target of $17.53 (buy)
• Green Technology Metals Ltd (ASX: GT1) with a share price target of $1.37 (speculative buy)
• Lake Resources N.L. (ASX: LKE) with a share price target of $2.83 (speculative buy)
• Liontown Resources Limited (ASX: LTR) with a share price target of $3.06 (speculative buy).

These ASX lithium shares have all fallen substantially over the past month since Goldman’s note.

• Allkem shares are down 26% over the past month to $9.64 at market close on Thursday
• Green Technology shares are down 33% to 57 cents
• Lake Resources shares are down 54% to 70 cents
• Liontown Resources shares are down 33% to 88 cents

The post Could ASX lithium shares be set for a boost? appeared first on The Motley Fool Australia.

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• Why did the Liontown share price slump 9% today?
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why Cooper Energy, Lake Resources, Leo Lithium, and Zip shares are sinking
• The Lake Resources share price has crashed 50% since joining the ASX 200 on Monday. What’s going on?
• ASX 200 midday update: Pilbara Minerals’ lithium price update, BHP tumbles

Motley Fool contributor Bronwyn Allen has positions in Allkem Limited and Macquarie Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Insurance Australia Group Ltd (ASX: IAG) share price outperformed the market on Thursday despite the company’s silence.

It was joined in the green by many of its S&P/ASX 200 Index (ASX: XJO) insurance peers.

As of Thursday’s close, the IAG share price is $4.40, up 2.8% on its previous close. Throughout the day, it hit a high of $4.51, representing a 5.4% surge.

For context, the ASX 200 gained 0.3% today while the All Ordinaries Index (ASX: XAO) rose 0.1%.

Let’s take a closer look at what might have gone on with the insurance giant and its peers on Thursday.

IAG share price rockets 5%

The IAG share price surged higher today despite no news from it or its direct peers.

The stock hit a near 10-year low of $4.02 last week. Thus, today’s gains might have represented some form of drawn-out rebound.

The share prices of fellow ASX 200 insurers Suncorp Group Ltd (ASX: SUN) and QBE Insurance Group Ltd (ASX: QBE) also lifted 0.65% and 2.03% respectively today.

Additionally, IAG’s home sector – the S&P/ASX 200 Financials Index (ASX: XFJ) – gained 0.7%.

IAG was the financial sector’s third-best performer today. It was beaten by Pinnacle Investment Management Group Ltd (ASX: PNI) and Virgin Money UK CDI (ASX: VUK). They ended the day higher by 3.92% and 3.18% respectively.

Weighing on the ASX 200 financials sector was the Zip Co Ltd (ASX: ZIP) share price. It hit a new multi-year low of 44 cents today.  

Unfortunately, today’s gain wasn’t enough to bump the IAG share price back into the longer-term green.

It’s now down 1.35% year to date and has slumped nearly 13% since this time last year.

The post Why did the IAG share price surge 5% on Thursday? appeared first on The Motley Fool Australia.

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• The ASX 200 share ready to bounce from 10-year lows: expert
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• Is the IAG share price a defensive buy amid rising interest rates?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended PINNACLE FPO and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Insurance Australia Group Limited and PINNACLE FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Commonwealth Bank of Australia (ASX: CBA) share price had a mixed day on Thursday.

Although the banking giant’s shares ended the day 0.2% higher at $89.75, this means they underperformed the ASX 200 and the rest of the big four.

For example, the ASX 200 rose 0.3% and the rest of the big four gained at least 0.5%, with Australia and New Zealand Banking Group Ltd (ASX: ANZ) the highlight with a 1.1% gain.

Why did the CBA share price underperform?

The softer performance by the CBA share price could be related to a broker note out of Morgan Stanley this week.

Due to concerns over a weaker housing and mortgage market, its analysts have taken an axe to their valuation of Australia’s largest bank.

According to the note, the broker has retained its underweight rating and cut its price target from $91.00 down to $79.00. This implies potential downside of 12% for investors over the next 12 months.

Morgan Stanley notes that Australian mortgage growth has slowed meaningfully during previous quick and aggressive rate hikes by the Reserve Bank of Australia. Unfortunately, this time it suspects that things could be even worse.

“In this cycle, we believe the slowdown will be greater given household leverage is higher than in prior cycles, mortgage rates are starting from a lower base, and cash rate hikes are likely to be larger,” the broker said.

Despite this, the broker does see value in the Westpac Banking Corp (ASX: WBC) share price. It has an overweight rating and $22.30 price target on Australia’s oldest bank’s shares.

As for the rest of the big four, its analysts have equal-weight (neutral/hold) ratings on their shares.

The post Why did the CBA share price underperform the other ASX 200 banks today? appeared first on The Motley Fool Australia.

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• Should you ‘buy the dip’ in ASX 200 bank shares?
• What’s the outlook for ASX 200 bank dividends?
• Worried about a US recession? Here’s what the ASX 200 banks are forecasting
• Why did Morgan Stanley just slash its target for the CBA share price?
• How does the Macquarie dividend stack up against the ASX big four banks?

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

It’s never a bad idea to follow advice from Warren Buffett. The billionaire investor has a wealth of knowledge and advice out there for people willing to listen. His annual meetings and shareholder letters offer significant insight into how best to approach investing. 

There’s one particular piece of his advice that today could prove immensely valuable to investors, one that could save you from incurring significant losses. If you’ve lost big on an investment, he says, “The most important thing to do if you find yourself in a hole is to stop digging.”

What’s the significance of this quote?

Investors who have incurred losses on a stock may consider themselves to be in a hole. The deeper the loss, the deeper the hole. And there can be a motivation to try and dig yourself out of this position by taking on more aggressive investments or averaging down.

For instance, suppose you bought shares of COVID-19 vaccine maker Moderna (NASDAQ: MRNA) last year when it was near its high of $497. If you were to buy an equal amount of shares now, at a price of around $128, that would bring your average down to $312.50. And if you were to buy twice as many shares at the current price, your average would be $251. 

There can be an incentive to load up on the stock — it will bring your average cost down. This would be the “digging” part of the equation. But in doing so, now you have invested significantly more money into an investment that has been in a free fall. Generally, Buffett isn’t opposed to buying a good stock that has fallen in value, but the problem is when it’s a risky buy (like Moderna is). In that situation, you could in effect be digging a deeper hole for yourself if the stock may not have strong prospects of recovering.

Averaging down isn’t always the best strategy

In the case of Moderna, the healthcare company faces a challenging road ahead. COVID-19 revenue beyond this year remains uncertain as global economies open back up and look to return to normal. While there will be some demand for booster shots and possibly even its COVID-19 vaccine that targets the omicron variant (should it obtain approval), there’s still a strong likelihood that Moderna’s revenue will fall in the years ahead. Although the Food and Drug Administration (FDA) granted Emergency Use Authorization (EUA) of its vaccine for children between the ages of six months and five years, fewer than one in five parents have indicated they would vaccinate their children as soon as they can.

Novavax (NASDAQ: NVAX) is another example of a stock that’s fallen heavily. Year to date, it has crashed 72%, which makes Moderna’s 50% decline look modest in comparison (the S&P 500, meanwhile, is down by 23%).

And in Novavax’s case, it doesn’t even have an approved COVID-19 vaccine for the U.S. market. Despite a recommendation from an FDA Advisory Committee, the FDA itself has not yet granted an EUA for Novavax’s vaccine.

Averaging down in these situations can prove to be dangerous. Both stocks are falling hard — and for good reason. The future of these companies is uncertain. Averaging down simply for the sole reason that a stock is down isn’t a great idea, and it could prove costly to investors.

Discretion is the better part of valor

If a stock isn’t performing well, the best option may simply be to sell your shares and look at other stocks instead. Moderna and Novavax are two examples of companies facing a tough road ahead, and there is no shortage of others. Rather than doubling down on those investments and putting more money at risk, investors may be better off buying shares of growth stocks with brighter and more certain futures. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post This Warren Buffett advice could save your portfolio in a bear market appeared first on The Motley Fool Australia.

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• Why did the Liontown share price slump 9% today?
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David Jagielski has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Moderna Inc. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Liontown Resources Limited (ASX: LTR) share price closed deep in the red on Thursday.

At the final bell, the lithium developer’s shares were down 9.28% to 88 cents apiece. That’s a big drop from when its shares were trading as high as $1.37 at the beginning of the month.

Let’s take a look at what might have impacted Liontown shares today.

Liontown loses ground amid broker price cut

While the company hasn’t made any announcements since earlier this month, one broker weighed in on the Liontown share price.

As reported by ANZ Share Investing, Macquarie slashed its price target on the company’s shares by 24% to $1.90.

The significant cut follows the bearish analysis of the battery metals market by peer investment firm, Goldman Sachs.

Nonetheless, based on the current share price, the re-adjusted broker rating implies an upside of roughly 115%.

In addition, the S&P/ASX 300 Metals and Mining (ASX: XMM) industry also finished in negative territory today, by 1.94%.

Other popular lithium companies such as Lake Resources NL (ASX: LKE) and Allkem Ltd (ASX: AKE) also saw their share prices fall today, by 16.67%, and 3.60%, respectively.

Currently, lithium carbonate per tonne is trading at US$71,400 per tonne. This reflects an increase of just 4.37% for the month compared to 430% year-on-year.

Liontown share price snapshot

Since reaching an all-time high of $2.19 in April, the Liontown share price has fallen almost 60%. Weakened sentiment across the industry is likely playing a significant hand in the drop.

When looking at year-to-date, Liontown shares are down almost 47%.

Based on today’s price, Liontown commands a market capitalisation of approximately $2.25 billion.

The post Why did the Liontown share price slump 9% today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Mineral Resources Limited (ASX: MIN) share price was out of form on Thursday.

The mining and mining services company’s shares dropped 3% to $47.22.

Why did the Mineral Resources share price drop?

Investors were selling down the Mineral Resources share price today amid concerns over the price of its two key commodities – iron ore and lithium.

In respect to the former, according to Metal Bulletin, the benchmark iron ore price continued its decline and fell a further 5.5% to US$109.40 a tonne during overnight trade.

This was driven by weakness in downstream demand in China despite the announcement of accelerated fiscal expenditure.

In addition, concerns that there could be a global recession have been weighing on base metal prices. This has led to fellow miners BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) dropping today.

As for the latter, lithium shares were sold off again on Thursday amid concerns over future prices of the battery making ingredient. This follows news out of Germany this week that it plans to scrap its ban on petrol and diesel car in 2035 in order to support its auto manufacturing sector.

If the rest of Europe follows suit, there could be fewer electric cars on the roads in 10 years than current forecasts. This would have obvious consequences for lithium demand.

So, with some analysts predicting that there will already be an oversupply of the white metal in the coming years, prices could go even lower than some fear.

Though, it is worth remembering that a lot can change between now and then.

The post Why did the Mineral Resources share price tumble on Thursday? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s been decades now since Telstra Corporation Ltd (ASX: TLS) first faced meaningful competition. It might seem absurd today, but Telstra used to be a government-owned company with a monopoly on telecommunications services in Australia.

But those days are long gone. Telstra now not only faces competition from old rival Optus, but also from a bevvy of other telco providers. These include ASX shares TPG Telecom Ltd (ASX: TPG) and Aussie Broadband Ltd (ASX: ABB).

Even so, Telstra remains the dominant telco in Australia with a formidable market share across both mobile and broadband products.

But perhaps Telstra will finally be nudged out of its top spot by its newest competitor.

According to reporting in the Australian Financial Review (AFR) this week, a new telco start-up is setting its sights on Telstra and the other major players in the Australian telecommunications market.

Telstra faces a new threat from telco start-up GigaComm

GigaComm was founded in Melbourne out of frustration over internet speeds that “just didn’t cut it”. That’s according to Gigacomm CEO and co-founder Sophearom En.

“We were getting 10 megabits per second … for $70 per month”, En told the AFR. “I have a background in telcos as both an investor and an operator and I just knew there had to be a better way… If you’re waiting minutes, or tens of minutes, for something to upload or download, that’s lost productivity time”.

Reportedly, GigaComm has just secured a $20.5 million capital raise, led by Palisade Impact and Endeavour Asset Management. This will help the start-up continue to build out its own infrastructure, which includes fibre optic cabling and fixed wireless technology.

The company offers plans that start at $79 per month with speeds of up to 200 megabits per second. That’s four times the average Australian download speed.

GigaComm is now present in 28 “metropolitan suburbs” across both Sydney and Melbourne.

The company will allocate the latest round of funding proceeds to further expansion in Sydney and Melbourne. As well as into the Brisbane and Canberra markets.

“We’re adding new suburbs and buildings every week. Our objective is to hit 1 million premises in the next few years,” said En.

It will be interesting to see if GigaComm can indeed build a significant presence in what is becoming a rather crowded field. No doubt Telstra is watching these developments closely.

The post ‘Just didn’t cut it’: Look out Telstra, a new high-speed start-up is coming for you! appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Aussie Broadband Limited. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended Aussie Broadband Limited and TPG Telecom Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Northern Star Resources Ltd (ASX: NST) share price is yet again heading south today despite no company announcements.

At the time of writing, the gold miner’s shares are backtracking 1.47% to $7.98. This means that its shares have fallen 7% so far this week.

In comparison, shares in Newcrest Mining Ltd (ASX: NCM) have shed almost 6% over the same timeframe.

The Evolution Mining Ltd (ASX: EVN) share price is suffering the biggest fall, down more than 8% this week.

What’s happening with Northern Star?

The price of gold appears to be on the way to its second consecutive weekly loss, which could be causing investors to offload the Northern Star share price.

According to Trading Economics, the price of gold slid towards $1,830 an ounce on Thursday, erasing gains from the previous session.

At the time of writing, the yellow metal is fetching US$1,832 per ounce.

In addition, the S&P/ASX 300 Metals and Mining Industry (ASX: XMM) has tumbled this week by more than 5%. The sector contains the top 300 ASX companies that are involved with gold, steel, and precious metals.

Another factor that could be playing a significant hand against Northern Star shares is further sanctions on Russia.

In particular, gold could be targeted by the European Union which may restrict Russian access to the commodity.

While it’s not exactly clear what the sanctions will involve, they may relate to banning gold imports and/or exports. If so, this could affect the country’s ability to tap into its assets held overseas to pay off its debts.

Northern Star share price review

A rout on the ASX since the start of May has led the Northern Star share price to tumble almost 19% for the period.

When looking at this year to date, its shares are down around 15%. They have also fallen around 23% over the past 12 months.

Northern Star commands a market capitalisation of approximately $9.44 billion.

The post The Northern Star share price has lost 7% so far this week. What’s happening? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has positions in Northern Star Resources Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Magellan Financial Group Ltd (ASX: MFG) share price has been one of the worst performers in the S&P/ASX 200 Index (ASX: XJO) over the past year. It has dropped over 70%.

There have been a few different negative catalysts for the business.

But could the fund manager actually be a strong turnaround idea? We’ll have a look at what some leading experts believe.

What has caused the negative sentiment?

Poor investment returns of its global shares strategies led to the loss of a key institutional client. Billions of dollars of funds under management (FUM) have left through the doors of the business. The level of FUM is a key influence on revenue, profit and dividends for Magellan. FUM changes can also impact the Magellan share price.

At 31 May 2022, the Magellan Global Fund (Open Class) (Managed Fund) (ASX: MGOC) only registered an average annual return per annum of 4.9% over the prior three years, underperforming its index benchmark by an average of 6.5% per annum. It’s showing underperformance over the prior year, five years and ten years as well. This fund accounted for $10 billion of Magellan’s FUM.

On 30 November 2021, it had $116.4 billion of FUM. This had reduced to $65 billion at 31 May 2022.

Magellan co-founder Hamish Douglass, who was also one of the leaders of the investment team and a key decision-maker, stepped back from operations due to mental health reasons. His exit was seen as a negative for the business. However, he will resume work in a consultancy role on 1 October 2022.

As a fund manager, the decline in global share market valuations also pulls down on Magellan’s FUM because the underlying portfolios would drop in value as well. At 31 May 2022, the Magellan Global Fund open class units had seen a 5.5% decline in investment performance.

Is the Magellan share price an opportunity?

The broker Morgan Stanley thinks there’s more declines to come. It has a price target of $11, which is a reduction of around 15%. It thinks that $2 billion flowed out last month and that billions more may leave the business in June. The Morgan Stanley rating is underweight which is similar to a sell rating.

UBS also rates the Magellan share price as a sell, with a price target of $13.50. This broker is concerned that the infrastructure investment segment of Magellan’s fund management business could see outflows as well. 

One of the most positive price targets is from Credit Suisse, with the target being $14.40. That’s a possible rise of over 10%. However, it’s only neutral on the business. 

Valuation

UBS is expecting a large decline in profit in FY23 from Magellan. Using UBS’ earnings estimates, Magellan is valued at 9 times FY23’s estimated earnings. 

The post Down 70% in one year: Is the Magellan share price a turnaround buy? appeared first on The Motley Fool Australia.

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More reading

• War on funds: What’s going on with Magellan shares and other ASX-listed fund managers?
• These were the worst performing ASX 200 shares last week
• Why Block, Evolution, Fortescue, and Magellan shares are sinking today
• Why Boss Energy, Crown, Magellan, and Shaver Shop shares are rising
• ASX 200 midday update: Magellan rebounds, Crown’s takeover boost

Motley Fool contributor Tristan Harrison has positions in Magellan Financial Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Beach Energy Ltd (ASX: BPT) share price is having a poor day on Thursday.

In afternoon trade, the energy producer’s shares are down almost 3% to $1.62.

Why is the Beach share price falling?

The Beach share price and other energy shares have come under pressure today following a pullback in oil prices.

Oil prices tumbled during overnight trade and have continued their slide during Asian trade.

For example, according to CNBC, the WTI crude oil price is down a further 1.75% to US$104.33 a barrel and the Brent crude oil price is down a further 1.5% to US$110.04 a barrel.

This has been driven by concerns that aggressive U.S. interest rate hikes could trigger a recession and dent demand for fuel.

Not even news that U.S. President Joe Biden has called on Congress to pass a three-month suspension of the federal gasoline tax has been able to stop oil’s decline. President Biden’s plan aims to help combat record fuel prices and provide temporary cost of living relief for American consumers this summer.

Is this a buying opportunity?

According to analysts at Macquarie, it’s not quite time to push the buy button.

This morning, its analysts upgraded Beach Energy’s shares to a neutral rating from underperform with a $1.65 price target. This is largely in line with where the Beach share price is trading today.

The broker made the move on valuation grounds after a sharp decline in recent weeks.

The post What’s going on with the Beach Energy share price on Thursday? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• Here’s why the Beach Energy share price is leaping 4% today
• 5 things to watch on the ASX 200 on Tuesday
• Why is the Beach Energy share price tumbling 7% on Monday?
• ASX 200 midday update: PointsBet jumps, energy shares sink, Vicinity’s upgrade

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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